I have now been reading a lot about open source licensing, and various license models. I however feel that I can't find anything that suits my needs. Very simply put, I would like to:

1. Offer my application at no cost to the academic world (students, professors, classrooms, etc.). This includes the compiled application, and the application source code.
2. Give the academic world the possibility to use, modify and redistribute it, given following condition:
a) They can only do so if the target is also the academic world
b) They can only do so if they also do not charge anything for that
c) They can only do so if they acknowledge the initial code (the usual notices in the source code, or application documentation)
3. Every entity that is not from the academic world will have to pay for the application and/or source code, and is not allowed to distribute it (modified or not) without asking for permission. Basically the traditional proprietary license

My problem is that the "open source" definition according to the "Open Source Initiative" requires "no discrimination against persons or group of persons", and by making a difference between academia and non-academia, I can't find an appropiate license model that is "open source" according to the OSI.

I can't think of a license that fits your needs. I'm a big believer in the MIT license because it's straightforward and open for any use of the technology but that's my own opinion and what I look for in a license.

A question that I would have for you is why are you looking to only grant a free license to academics but not others? If you want to be altruistic and provide the world with a great piece of technology why would you limit how it could be used if it could also bring value to the world through a commercial product as well?

Well, my opinion about open source is a bit different... in a same way I believe that only very few people became doctors because they wanted to "do good", I believe that very few are really being altruistic.
While on one hand open source is very good for hobbyists, and also very good for larger corporations, open source might be very hard to support when you are a one-man company or a very small company, since it needs time to get the benefits of open source, and you might not have the resources to live long enough until then! And that is why I can't go fully open source: I would lose my income completely (I am aware that there are alternate ways of getting income, e.g. via services, etc., but this also always depends on the type of application)

The word "open source" is closely related to the "open source initiative", but in my understanding one could legally also use it to say that the source code is viewable (even if not recommended I guess). What would be a better naming in that case?

My problem is that the "open source" definition according to the "Open Source Initiative" requires "no discrimination against persons or group of persons", and by making a difference between academia and non-academia, I can't find an appropiate license model that is "open source" according to the OSI.

Indeed, you've answered the question - you won't find an Open Source licence like this, because it isn't Open Source by definition (Well sure, there's the debate about who gets to define the term, but AIUI, the term "Open Source" was popularied by OSI, and the licences that fit that definition, so it would be best not to potentially mislead people by claiming something is "open source". Saying the code is viewable, available, or whatever as you suggest, seems absolutely fine to me however)

Note that there's also another problem than the discrimination clause - Open Source also requires allowing people to sell the software, so preventing that would be another reason why you won't find an Open Source licence.

That doesn't mean there might not be an off-the-shelf licence that suits your needs, so it is worth asking. Though all the off-the-shelf licences for software that I've seen tend to full under the umbrella of the OSI's or FSF's definitions.

If the goal is to let a few people get access to the source and then eventually either open the project up fully or turn it into a source of income why not just use a proprietary license and then grant free licenses to a select group of academics? You can still provide source code to a licensee and maintain control of the source and any modifications they make. You can attach any dollar amount you want to granting a license and it doesn't have to be uniform across licensees so you could charge universities $0 but charge a business $1,000,000.

As you say it doesn't fit the open source model but there's nothing wrong with that. If you find a model of licensing that you want to do then go for it but just don't try to shoehorn it into the open source name and you should be fine.

There is however still something that bothers me: before starting to read about open source, the world was simpe for me:

open source = free (i.e. at no charge) and source code visible
other = not free

And this is probably how most people see it: If they have a listing of various software packages that do similar things, categorized in "open source" and "other", they won't even bother looking at the "other" software, unless a very specific feature is desired. And this is handicapping, for me, since I don't get the same exposure.

Would "forking" my product be an option? Meaning creating a new product. The old is open source, the new is commercial. They have different names, but they are based on the same source base (but might eventually develop separately)?

If this is an option, would names like: "EasyPaint Edu" and "EasyPaint Pro" be misleading? ("EasyPaint" is just an example name here)

The model for your license is almost identical to one that I needed for a project of mine. The only solution that made me happy was writing my own license. Looking at BSD, MIT, and other commercial licenses should give you a good idea on what you need to include. Just make sure that it's very clear that you hold zero liability for its use, and that it may only be used under the conditions you specify. Lastly, make sure the license contains your name, the date, and some contact info so the rightful owner of the project and license (you) is correctly identified.

There are plenty of examples out there where a company will release an open source version that is essentially a fork of a commercial product. This can work successfully if the goal of the open source fork is to truly be a growing open source project. Too often in this scenario the open source portion is only meant to act as a "Demo" to interest you in the technology and purchase the full license. Once again there's nothing inherently wrong with this approach but it will limit the benefits that you would normally see from open source projects as fewer people will be interested in contributing.

What many projects do, is to use exactly the same code base for the commercial and open source version. Then they chose a copyleft open source license (like GPL) for the open source part and whatever commercial license they like for the commercial customers. Copyleft is a must in this case, because it may be the only reason for someone to chose the commercial version if they had to put their results back in the public. But this will most likely only work for library projects, not so much for programs...

Say, I make my application open source under GPL. Can I still grant some special rights to some people/companies, so that they can release their modifications under a proprietary license?
In my opinion yes, since I am still the owner and copyright holder of the software.

Exactly. You own the copyright. You may provide any exceptions you want. But be aware that it will be hard (read: impossible) to enforce stronger restriction on some people, because they will then always switch to the open license.

Well, there is NPOSL, which I guess is as close to "academic" as you can get (assuming that "academic use" makes no profit).

Though I wonder what the hindrance is to doing the same as a thousand existing projects: Dual license GPL and proprietary license. Thisa) allows academics to use the work (under the terms of the GPL, which is not a problem for academic work)b) allow hobby programmers to do the same (under the terms of the GPL)c) does not allow companies to exploit your work, except if they release their product under the GPL as well (which is usually not an option)d) allows companies to exploit your work after paying for that right